IN THE EMPLOYMENT RELATIONS TRIBUNAL
AT SUVA
ERT Grievance No. 36 of 2011

BETWEEN:

DANIELLE KELI
Grievor

AND:

CREDIT CORPORATION (FIJI) LIMITED
Employer

Appearances:
Mr. Pramod Rae for the Grievor
Mr. Ritesh Naidu for the Employer

DETERMINATION OF THE EMPLOYMENT RELATIONS TRIBUNAL

1.0	Employment Relations Grievance

1.1 Background to the Grievance

This grievance was registered with Ministry of Labour on 23rd November 2010. Mediation was attempted on 1st February 2011 but was not successful. The mediator referred the grievance to the ERT on 2nd February 2011 in accordance with s194 (5) of ERP outlining the nature of unsettled employment grievance with the following terms of reference:-

“The decision by management to terminate the services of the grievor which she claimed was unfair and unjustified”.

2.0 Cause before the ERT

2.1 In the Employment Relations Tribunal (or “the ERT”), the parties were directed to file preliminary submissions by the Hon. Chief Tribunal on 4th March 2011 whereby the Employer filed its Preliminary Written Submissions on 16th March 2011 and Grievor filed her Preliminary Written Submissions on 20th April 2011. Employer also filed further Submissions In Reply on 3rd May 2011.

2.2 Hearing of the substantive matter was fixed for 30th August 2011 which was vacated by consent of the parties. 

2.3 Hereafter hearing was re-set for 7th and 8th December 2011 which commenced and completed within the allocated days. 

2.4 The employer called two witnesses to tender their evidence:-

•	Mr Philip Mow, the Financial Controller of the Credit Corporation (Fiji) Limited
•	Mr Ross MacDonald, the Managing Director of Credit Corporation (Fiji) Limited

2.5 The grievor gave evidence as the only witness from her side.

2.6 The parties then submitted their respective Closing Oral Submissions on 14th December 2011 after they were given simultaneous opportunity to file and serve any Closing Written Submissions by 13th December 2011 where both parties duly complied. I must acknowledge that found the written submissions quite useful.

3.0	Issue(s) before the ERT

3.1 The ERT shall assess whether the summary dismissal was justified substantially and procedurally where after considering the submissions from both sides, this Tribunal will determine these specific issues:-

a.	Whether the employer had justification for gross misconduct in substance to invoke summary dismissal against the Grievor pursuant to section 33(1) of the ERP. This, the Tribunal will assess in accordance with the employment relationship that existed through a contract of service between the parties in conjunction with the provisions under the Employment Relations Promulgation 2007 (or “the ERP”) that the employer also used to invoke summary dismissal as there is contention by the grevior that the employer invoked section 33 of the ERP when the contract of service provided for dismissal on notice only. The ERT will further determine whether the alleged “misappropriation of company funds” was capable of being classified as “gross misconduct” to justify summary dismissal and whether the employer acted reasonably in dismissing the Grievor for that reason;

b.	Whether the employer was required to accord procedural fairness at the time when summary dismissal was effected; and 

c.	Whether the grievor was discharged with dignity at the time of her dismissal without any humiliation, in that she was treated fairly and with appropriate respect and dignity [as applied in the case of Central Manufacturing Company Limited v Yashni Kant (Unreported Fiji Supreme Court Case Number CBV 0010 of 2002) and followed by the Employment Relations Court in the case of Carpenters Fiji Limited v Isoa Latianara ERC No. 7 of 2011].

3.2	In other words, this ERT will determine whether the purported summary dismissal of the Grievor by the Employer that occurred on 30th September 2010 was unlawful, invalid and unfair as alleged by the Grievor. If so, should the relief (or remedies) available to the Grievor including reinstatement, compensation and costs be awarded? 

4.0 Established Facts 

4.1 The employer is a registered financial institution operating under the name of Credit Corporation (Fiji) Limited (or “CCFL”).

4.2 The grievor became a “worker” of CCFL by virtue of being offered a position of Receptionist – Suva on 15th September 2009 as per the contract of service (or employment) of even date (Exhibit “5”). 

4.3 However I have noted that the attached ‘ACCETANCE’ part of the letter of employment was neither signed nor dated by either party. Nevertheless, there was no contention as to the legality or validity of the said contract of service as both parties used the same document to rely on their respective defences. As such, I have accepted in evidence this document in its entirety pursuant to section 231(1) & (2) of the ERP.

4.4 It was an established fact that on 30 September 2010, the employer summarily dismissed (that is “with immediate effect”) the grievor for gross misconduct pursuant to section 33(1) (a) of the ERP 2007. 

4.5 The allegation of ‘gross misconduct’ was in relation to “misappropriation of company funds” as contained in the employer’s letter of dismissal or Exhibit “7”. 

4.6 The Employer through its two witnesses gave evidence that a former cashier known as one, Ms Symone Paul was not authorized by CCFL to give a loan to the Grievor or to anyone for that matter. 

4.7 It was the Grievor’s evidence that she had obtained a loan of $288.00 from the cashier directly on 22 September 2010 instead of utilizing the company policy as “she did not know how to go about as it only appeared on contract”. This policy allowed staff of CCFL to obtain an authorized loan of 5% of their salary from the employer.

4.8 When the employer discovered that a number of CCFL staff including the grievor was involved in a cash loan transaction with the cashier, they proceeded to investigate this on the basis that they considered the loan to be an “unauthorized loan” that was not sanctioned by the employer. 

4.9 Subsequently, the grevior amongst her (seven) other colleagues were all summarily dismissed where at least in this instance, the employer gave reason for dismissal as misappropriation of funds in the letter of termination.

4.10 The names of the employees who were all also summarily dismissed on 30th September 2010 for the same offence as pointed out in the evidence of the grievor and employer’s witness, Mr MacDonald respectively in no particular order are following:-

•	Sereana
•	Symone Paul
•	Lorainne
•	Fifita
•	Mohini
•	Danielle (the grievor)
•	Angie
•	Leo 

4.11 Suffice to note that one of the aforementioned ex-employee (Leo) has also sought redress and remedies from this ERT for alleged unlawful, discriminatory and unfair dismissal that took place simultaneously with this grievor. 

4.12 I am obligated to mention this fact as I am also tasked with ascertaining whether summary dismissal was “disproportionate to the gravity of the allegation” as alleged by the grievor in her preliminary submissions and reiterated in her closing submissions dated 13 December 2011 (as per clause 9.0). 

4.13 In Leo’s grievance matter there is a further allegation of unfair discrimination, which is slightly a different issue from what this grievor is seeking in terms of remedy against the penalty which she alleges is far more disproportionate to the misconduct or as Mr Rae stated in his closing oral submissions that “there is no misconduct at all”.

4.14 The relevance and importance of this particular evidence (as stated in 4.10 above) is that both matters attempted to draw reference to the penalty imposed by the employer on a group of staff members (which includes the grievor being terminated on the same day) in two different light:-

i.	That some staff were given harsher penalty (summary dismissal) whilst others are still retained in their employment. It is alleged that after the eight staff were terminated on 30th September 2010, some other staff members of CCFL were also alleged with the same offence, however they were not terminated (an issue of unfair discrimination in Leo’s grievance matter); and/or 

ii.	As pleaded in this instance that the penalty such as summary dismissal was not warranted as the misconduct failed to be classed within a range of reasonable responses that would sufficiently be regarded as “gross misconduct”. Hence, it is disproportionate to the gravity of the offence alleged by the employer. There is a further assertion by the grievor here that there was no misconduct at all.

4.15 No doubt that there are overlapping facts and issues in both the allegation of unfair discrimination and whether the penalty is indeed “disproportionate” to the alleged misconduct where I must deal with the two issues separately. That said, because there were a number of staff summarily dismissed together with the grievor (which fact was duly established by the evidence in this case, particularly since there was no dispute regarding this fact), it allows this Tribunal to look at the issue of “disproportionate” penalty as to how the entire misconduct was viewed by the employer at the relevant time; how they reacted to it; and simultaneously assess whether the penalty was equal and fair to all those who were affected at the material time, not subsequent or few days or months later, but at the time the summary dismissal was carried out, that is on 30 September 2010.

4.16 It was also an established fact that just before the grevior and her colleagues were all dismissed, they had an audience or interview with the Managing Director, Mr MacDonald and thereafter they were handed over their letter of termination.

5.0 Is Summary Dismissal Justified in Substance?

5.1 It was the employer’s defence that they had invoked section 33(1)(a) of the ERP 2007 to carry out summary dismissal of the grievor. 

5.2 However, this ERT noted that the grevior had twofold contention in regards to her (summary) dismissal: these were:-

a.	That the termination was not in compliance with the terms and conditions of her contract of employment in terms of the ‘TERMINATION’ clause (see below) which the grievor claimed was the only way any termination was possible, hence it was unjustified. 

TERMINATION “…One month’s notice in writing from either side or a shorter period if mutually acceptable.”

b.	That the reasons for dismissal as stated under section 33(2) of the ERP were in broad terms without giving details of amounts or the specific actions on the worker’s part constituting “misappropriation” which largely failed to fall within the strict definition of “misappropriation of funds” where the common and ordinary usage implies “abuse or misuse for purposes other than someone who has been entrusted with money for a particular purpose”.

5.3 I have noted that on one hand, the grevior is relying on her contract of service to defend her termination being unlawful and unjustified as it was not strictly in compliance with the terms and conditions therein and on the other hand, she is stating that the employer failed to satisfy section 33 (2) of the ERP. It would then appear that the grevior is leaving it to the ERT to interpret which method of termination is lawful (and fair) and whichever instance is found to be lawful, then it is up to the Tribunal to decide whether the employer acted in accordance with the requirements stated therein for a lawful termination to persist.

5.4 Indeed, the first point of reference for termination on the premise of good faith relationship is always the contract of service between the parties. This goes to the definition of an employment; employer; and worker in the ERP which all make reference to “contract of service” being a basis for an employment. 

5.5 A contract of service is defined as:

 “…a written or oral contract, whether expressed or implied, to employ or to serve as a worker for fixed or indefinite period…”

5.6 The “good faith” relationship that I allude to in a contract of service was tested in the 1997 decision of the Supreme Court of Canada in Wallace v United Grain Growers Ltd., [1997] 3 S.C.R. 701 where the Court injected into the employment relationship the requirement of “good faith conduct” at the time of termination, where in passing the Court spoke of “special relationship” which governs the parties to an employment relationship. This case assessed the reasonable notice period required at the time of the termination and thus Wallace is useful in considering “good faith and fair dealing” where the Court noted that:-

 “…, at minimum, … in the course of dismissal employers ought to be candid, reasonable, honest and forthright with their employees and should refrain from engaging in conduct that is unfair or is in bad faith by being, for example, untruthful, misleading or unduly insensitive…” (at page 46).

5.7 What this means is that as long as the employer at the time of dismissal is honest, upfront and makes the employee aware of the path they are taking in terms of an action or misconduct of the worker which may led to dismissal, for whatever reason (lawful cause or no cause) which they are able to communicate to the worker in a dignified and fair manner without inflicting humiliation or misleading in terms of giving any false information, whether in writing or not, the requirement of “good faith” should suffice. I am thus going to assess in this instance whether the parties presented and fulfilled the essential good faith, which I must say goes both ways.

5.8 In the grievance before me, clearly the contract of service between the parties is silent on whether any termination can also include summary dismissal although I have noted that “a shorter period” can be invoked if there is mutual acceptance. Surely when parties agree to end the contract of service, say within one day or with immediate effect, then it would be mutually terminated. 

5.9 The employment contract does not specify what grounds can invoke the ‘TERMINATION’ clause other the clause ‘OUTSIDE BUSINESS INTERESTS’ that could give rise to “immediate termination”. Summary dismissal is then allowed under the contract of service, but for one specified ground only. 

5.10 The contract of service being silent on any other grounds for termination (or dismissal) such as a “misconduct”, and whether “misappropriation of funds” would fall within a category of misconduct (serious/gross or otherwise), then leaves this Tribunal to assess whether there is an entitlement or right accorded to the employer to allow CCFL to invoke section 33 of the ERP in the absence of the contract of service not allowing for any further termination with immediate effect.

5.11 Simply put, the question for this ERT is to determine whether the Employer can end the contract of service with immediate effect by invoking a statutory provision in the ERP which is a provision for summary dismissal on the grounds of gross misconduct.

5.12 The ERP 2007 is now is an established law of Fiji governing employment relationship between an employer and employee (or worker). The ERT is of the view that because the contract of service does not mention explicitly summary dismissal for gross misconduct therein, it does not take away the employer’s right to summarily dismiss an employee (but for only the stated grounds under s33 of the ERP), which is now an explicit provision in the law or statute.

5.13 Some relevant and applicable provisions of the ERP 2007 that this ERT shall rely on are as follows (underlining is my emphasis):-

Section 33 (1) stipulates:

“No employer may dismiss a worker without notice except in the following circumstances –

(a)	where a worker is guilty of gross misconduct;

(b)	for willful disobedience to lawful orders given by employer;

(c)	for lack of skill or qualification which the worker expressly or by implication warrants to possess;

(d)	for habitual or substantial neglect of the worker’s duties; or

(e)	for continual or habitual absence from work without the permission of the employer and without other reasonable excuse.

Section 33 (2) stipulates:-

The employer must, provide the worker with reasons, in writing, for the summary dismissal at the time he or she is dismissed.

Section 34 states:

If a worker is summarily dismissed for lawful cause, the worker must be paid on dismissal the wages due up to the time of the worker’s dismissal.

Section 114 provides:

If a worker is dismissed, the employer must, when dismissing the worker provide to the worker with a written statement setting out the reasons for the dismissal. 
 
Section 7 of Schedule 4 (Section 110) stipulates: If-

(a)	the worker is dismissed; or

(b)	the worker is not satisfied with the employer’s written response; or

(c)	the employer fails to provide, within 7 days after the day on which the employer receives the worker’s written statement, a written response; or

(d)	the employer and worker have agreed to waive the requirements for an exchange of written statements and the worker is not satisfied with the employer’s response to the grievance,

the worker may refer the employment grievance to the Mediation Services in the prescribed manner. 

5.14	In a normal course, the grievor has a right to come before the ERT for redress and remedies for employment grievances under sections 109, 110 and 111 of the ERP for any type of “dismissal” pursuant to section 7 of the Schedule 4. “Dismissal” in the ERP means “any termination of employment by an employer including those under section 33” (my emphasis).

5.15	In a similar manner, the drafters of ERP have also generally intended Section 33 of the ERP as a presumption in favour of the employers where clearly if a contract of service fails to provide clarity or creates a lacuna it aids to interpret the requirements for a valid and lawful “summary dismissal”, which notably, in the past when there was no statutory application, still gave rise to common law right to summary dismissal as and when applicable.

5.16	Further under s30(4) of the ERP it is clearly stated that:-

“Nothing in this Promulgation precludes either party from summarily terminating a contract of service for lawful cause”.

5.17	This was also clarified by your Ladyship, Wati J in the recent judgment of Carpenters Fiji Limited v Isoa Latianara ERC No. 7 of 2011, where the Court looked at how contract of service can be interpreted in view of termination methods. Here, the Court noted that there were two mutually exclusive dismissal regimes in the worker’s employment contract where dismissal could occur either by a week’s notice or payment in lieu, or summary dismissal for serious misconduct without notice or payment in lieu. 

5.18	Additionally, the Court noted in Isoa’s case that the employer was entitled to dismiss summarily for gross misconduct pursuant to s33 of the ERP (as per Respondent’s Submission at page 5). 

5.19	The Court went onto say and I quote:-

“…Indisputably the termination clause permits termination without cause….and also for summary dismissal, without notice for serious misconduct. Once the employer made serious misconduct the basis of termination, it is then correct for the Tribunal to make a finding as to whether the cause for termination was established by the employer as the onus to establish the ground is always on the employer. When the Tribunal made a finding that the lawful cause to terminate was not established, the termination became wrong and unlawful. The employer cannot then go back and rely on its giving of one week’s wages in lieu of notice to say that it relied on the termination clause. That clause could only be relied on, if termination was done “without cause”. In this case, the termination was for a cause and I no better way to put it than Mr. Rae has that in circumstances of this “there could not be a hybrid or combination of termination methods…” (Underlining is my emphasis)

5.20	In comparison to the facts of this case, clearly the contract of service is limited in instances where summary dismissal can be invoked as stated in 5.9 above although it does not explicitly state that it is the only manner in which summary dismissal can be invoked. , But, if summary dismissal under the contract of employment can be done in one instant, can it also allow the employer to invoke summary dismissal for gross misconduct as alleged by the employer, pursuant to s33 of the ERP?

5.21	I have no reservation that s30(4) of the ERP and Isoa’s case applies here to allow the employer to safely rely on s33 of the ERP to invoke and carry out summary dismissal as long as the employer has taken steps to comply with the statutory requirements in terms of establishing a “lawful cause” which I shall come to shortly.

5.22	Suffice to note where good faith requirement is concerned, there was no ambiguity or false information or misunderstanding by the grievor that the employer had chosen to exercise a statutory right under s33 of the ERP to invoke termination of the grievor as per the letter of termination (Exhibit “7”) rather than invoking the “TERMINATION” clause in the worker’s contract of service. I see no problem with the employer doing this. In fact they have maintained throughout the proceedings that section 33 is the employer’s basis for termination.

5.23	Accordingly, the right of the employer to invoke summary dismissal for gross misconduct being established in this case, the next important aspect to look at would be whether or not the employer satisfactorily complied with the mandatory requirement of the law under section 33 (2), that is to provide reasons in writing at the time of dismissal. Here, there is some contention by the grievor that employer failed to satisfactorily discharge its obligation under this provision of the ERP, in that the reasons were not properly framed and made known to the grievor.

5.24	I am of the view that first it is important to establish whether or not there was a lawful cause for summary dismissal as per Section 34 where it states that “If a worker is summarily dismissed for lawful cause, the worker must be … to the time of the worker’s dismissal” (emphasis provided). 

5.25	This in itself will guide the ERT to examine the circumstances and nature of offence alleged here to determine whether or not it sufficed for purposes s 33(2) of the ERP on basis of good faith that must exist between the parties at all times, more so at the time of termination.

5.26	I must say that section 34 of the ERP makes only a reference but does not elaborate what really constitutes a “lawful cause”. However, one would assume section 33(1) of ERP gives the prerequisite premise upon which any summary dismissal can be effected, as long as it is on lawful grounds. Here the employer relied on section 33(1)(a) where, “no employer may dismiss a worker without notice except …where a worker is guilty of gross misconduct (my emphasis). 

5.27	There are three limps to this provision that is often misunderstood in my opinion:-

i.	First, goes to determining the guilt of the employee where clearly the employer will have the challenging task whilst balancing that special employment relationship (implied or expressed) with evidence gathered to fairly process a guilty verdict on what would be on the standard of proof on the “balance of probabilities”. This because in proceedings before the Tribunal the standard of proof to which a party must establish its case is something approaching the lesser standard as the “balance of probabilities”;
 
ii.	Second, lawfully establishing the alleged misconduct of the employee to be one that could be deemed “gross” or sufficiently so serious to warrant a severe penalty such as an immediate or instant termination (without notice); and

iii.	Third, somewhere between the establishment of guilt and the actual termination process, the issue of procedural fairness should have a role to play and frequently this aspect is also misunderstood by the parties as to what point in time procedures are to be followed to accord fair and just termination to the grievor. 

Often also, the ERT is grappled with the additional question whether procedures need to be followed at all if immediate termination is what literally and naturally regarded or deemed as a summary dismissal?

5.28	Various case-laws (State v Arbitration Tribunal & Ors, High Court Suva, Civil Action No. HBJ of 2007; Clouston & Co v Corry (1906) A.C. 122 at 129; etc) have concluded that “gross misconduct” is not a concept capable of being defined. 

5.29	Thus I fully agree with employer’s submission that gross misconduct is not a fixed concept and shall depend on the circumstance (as per the principle in State v Arbitration Tribunal & others, High Court, Suva, Civil Action No. HBJ of 2007). 

5.30	“Gross misconduct” is then naturally not defined by the ERP, but looking at a “misconduct”, this can be best described as the employee’s failure to adhere to the rules and policies of the employer during working hours (and sometimes even after hours). Such behaviour is normally deliberate, intentional and not as a result of circumstances beyond the control of the employee. Some common forms of misconduct are: theft, fraud, dishonesty, negligence, insubordination, absence without permission from work, arriving late for work, swearing at colleagues, assault, etc.

5.31	To class a misconduct on the scale of severity, being serious or gross, cannot be an easy task for any employer where that employer without deliberate intention has to become the first “judge” to assess whether it fits the gross misconduct category under section 33(1)(a) and further, whether it allows on the strength of evidence to declare the worker’s conduct so gross in order to arrive at a guilty verdict. For this reason alone, it usually assists to have in place an explicit nature of gross misconduct that may warrant summary dismissal made known to parties either in the employment contract or polices or even code of conduct of the employer. Therefore, in order to discipline and possibly dismiss an employee for gross misconduct the employer will have to be able to prove that the employee contravened a rule or standard regulating conduct in, or of relevance to, the workplace; and

i.	that the rule was a valid or reasonable rule or standard; 

ii.	the employee was aware, or could reasonably be expected to have been aware, of the rule or standard; and

iii.	the rule or standard has been consistently applied by the employer. 

5.32	The above guideline or indeed any guidelines are not provided in the ERP to avoid ambiguity and more so, to avoid the employer being confused as to what should be the process for determining substantive fairness in regard to the alleged misconduct where it would be an acceptable and reasonable code of good practice for any type of dismissal. For example, such guidelines is explicitly enshrined in the South African Labour Relations Act 1996 which no doubt will have good use in Fiji if it is taken as a token of good faith practice to ensure that any dismissal is not without fair reasons or fair procedure.

5.33	Furthermore, to establish whether the reasons provided by the employer are good enough to justify dismissal, there should be some means for assessing this (again I am using South African laws for some guidance): for example:-

i.	Was the company rule or policy or behavioral standard broken?

ii.	If so, was the employee aware of the transgressed rule, standard or policy or could the employee be reasonably expected to have been aware of it (You cannot discipline an employee for breaking a rule if he was never aware of the rule in the first place).

iii.	Is dismissal an appropriate sanction for this transgression?

iv.	Consider the circumstances surrounding the breach of the rule; and

v.	Consider the nature of the job.

5.34	Although the ERP is silent on how to establish a gross misconduct and its lawfulness, there is no doubt in my mind after analyzing the evidence in this case that the employer had a reasonable rule in place where the grievor ought to have known its existence and purpose, particularly in a circumstance where loans (or money) could be obtained from the employer in an authorized manner. 

5.35	Clearly, a staff loan policy existed at CCFL as a rule of the employer to provide authorized loans to the staff. 

5.36	The most glaring piece of evidence was when Mr. MacDonald clarified that at least the grievor ought to have had knowledge of this policy as it was visibly contained or referred to in the employee’s contract of service. The contract of employment dated 15th September 2009, under the heading “STAFF BENEFITS” states where relevant and applicable that:-

STAFF BENEFITS CCFL provides staff loans under certain conditions which may change from time to time at the discretion of CCFL…Policies for staff benefits are subject to change from time to time and any change in these policies will apply to you…” (my emphasis).

5.37	The grievor confirmed in her evidence that she was aware of the abovementioned clause by virtue of accepting her contract of employment. I had earlier mentioned that the contract of service was not signed and dated by either party but there was no contention as to its relevance, application or legality for purposes of the rights and obligations on either side bestowed in the contract of service. As such, I have accepted that the grevior was made aware of this clause in her contract of service which alluded to policies and not practice that she could utilize for purposes of obtaining a staff loan.

5.38	Accordingly, this ERT will not substitute its views for that of the employer in determining whether the employer acted reasonably. Rather the Tribunal has a task to test objectively whether the employer had acted reasonably: (as per the principle in Michael Strouthos v London Underground Limited, England and Wales Court of Appeal (Civil) Decisions, [2004] (18 March 2004). 

5.39	I have also noted his Lordship Justice Gates decision in the case of Philips Thomas v Fiji Electricity Authority [2004] FJHC 303 where he applied the ratio in the English Court of Appeal case of X vY [2004] EWCA Civ 662 as follows:-

“…the law on dismissal for conduct is clear. It has been said to be a four pronged test. The Foley test was cited with approval in X v Y (supra at para 18):-

“the employer must show that he believed that there had been misconduct by the employee; that there were reasonable grounds for that belief; that he had carried out as much investigation into the matter as reasonable in all the circumstance; and that the decision to dismiss him for that conduct reason was within the range of reasonable responses of a reasonable employer.”

5.40	In keeping with this principle given that ERP 2007 does not provide guidance as to how to arrive at a “guilty” verdict for summary dismissal for gross misconduct, this Tribunal will now test objectively whether the employer acted reasonably in establishing a lawful cause as a basis to regard the grievor’s alleged misconduct within the range of gross misconduct. And whether the employer accorded fair process when establishing that guilt.

6.0 Was “lawful Cause” for “Gross Misconduct” Established?

6.1 Evidence from both the employer’s witnesses indicated that the alleged misappropriation of company funds that the employer gave as a reason for summary dismissal came about when the CCFL discovered that a particular cashier at the time, by the name Symone Paul (as referred to throughout the hearing) to have been engaged in an ‘alleged practice’ of handing out cash loans to staff without knowledge or “authorization” of the employer. 

6.2	According to the employer, these monies which they regarded as “unauthorized loans” were received by the cashier in course of the employer’s business which was in fact payments made by the employer’s clients. It was the cashier’s duty and responsibility to organize deposit of the same into the employer’s bank account; instead, the cashier was using the same monies to provide cash loans to the staff whenever required as part of an alleged practice of “IOU” or “I owe You Voucher System”.

6.3	There was no dispute before the ERT that the grevior was one such staff who had approached the cashier for a loan of $288.00 where the grievor stated that she had signed for a loan under a “I owe You” account with the cashier. Grievor’s closing submission filed on 13 December 2011 (at clause 2.3) also confirms this.

6.4	In addition, through Exhibit “1”, the employer’s witness Mr. Mow confirmed that he had received an email from Symone Paul on 27th September 2010 who gave a detailed account of all monies owed by the concerned staff where the grievor’s name also appeared on the list as “DANIELLE $288”. 

6.5	It was established that the cashier kept records in her diary of the names of the persons whom she had provided cash loans to (as per Exhibit “2”).

6.6	The grievor gave evidence that she took the loan on 22 September 2010 and thereafter, on or about 27 September 2010, the Financial Controller (or “FC”), Mr Mow called the grievor into his office to discuss the loan she had obtained from the cashier. 

6.7	Mr Mow gave evidence that he suddenly came to knowledge on or about 24th September 2010 during a lunch break through a relieving cashier of the variance in the money in the till and those receipted to the CCFL clients. When the cashier Symone Paul returned from lunch Mr Mow (FC) asked her to explain the variance and provide details to which the cashier told him was due to money taken by staff as “loans”. 

6.8	A sum total of the said loan stood roughly above $20,000.00.

6.9	The FC gave evidence that after the cashier had provided him with a list of the names as presented through Exhibit “1”, he then proceeded to inform and seek the Managing Director’s (or “the MD”) directions. 

6.10	FC after his discussion with the MD then proceeded to investigate or interview all those staff allegedly involved in taking a loan from the cashier. This is when he spoke to the grievor on 27th September 2010 as confirmed by both, the FC and the grievor. 

6.11	During their discussion on 27th September 2010, grevior admitted to the FC that she took a loan from the cashier. It was the grievor’s further evidence that the FC told her that borrowing from the cashier was not allowed and then informed her that if she needed a loan, she was to go to him. 

6.12	FC thereafter asked the grievor to immediately pay off the loan which money belonged to the company and not the cashier. The grevior as soon as possible proceeded to pay the money back to the company after her meeting with the FC which was proved through the receipts tendered in evidence: $200 was paid on 27th September, 2010 and remaining $88.00 was paid off on 29th September, 2010 (as per Exhibit “10”).

6.13	There was some issues raised by Mr Rae why Ms Paul, the actual perpetrator of the “unauthorized loans” was allowed to remain in her usual position or employment until every staff alluded in 4.10 above was terminated (including the cashier) on 30 September 2010, to which Mr Mow explained that the process of seeking details of the loans, the preparation of summary of accounts and the names of the staff involved took some time which clearly was provided by the cashier on 27th September 2010. 

6.14	The timeline here is quite short (of about three days) before the investigation process (including 2 days for the weekend) and additional three days before the actual termination period which is reasonable in this ERT’s view.

6.15	The cashier, “Symone Paul” was not called to stand to verify or negate any facts and/or evidence adduced by both parties where she was repeatedly referred to as the person who started this whole practice of IOU or what Mr. Rae also referred during his cross examination of the employer’s witness, Mr Mow, to be the “cashier’s lending scam”. Without doubt, Ms Paul’s evidence would have been useful in properly understanding what was this alleged practice of IOU where she seemed to have roped in CCFL staff by unilaterally offering cash loans and whether she had made it clear to the recipients of the loan that it was an authorized practice or not for purposes of a staff loan.

6.16	Despite Symone Paul’s absence at the evidentiary hearing, I have duly noted one crucial aspect of the evidence in this matter which is that the grievor did not dispute or disagree with the fact that she had taken a cash loan from Ms Paul, which she said that she did not know was unauthorized by the employer. 

6.17	To then summarize the grievor’s foremost contention that this ERT noted would be that she did not agree with the employer that the loan she had in fact obtained from Ms Paul was unauthorized but she maintained throughout her evidence that she believed it to be a usual practice under IOU that Ms Paul was using to dish out these loans. The grievor further maintained that she did not know that Ms Paul had no right to give her the loan and that despite she taken a loan from Ms Paul when she had come to knowledge that it was unauthorized, she attempted to repay the employer immediately. Hence the summary dismissal was illegal, unfair and disproportionate to the gravity of the offence.

6.18	The employer largely contested that the alleged practice of “IOU” was never authorized by the company as there was an explicit policy in place where CCFL staff could access loans within the terms and conditions of the employer’s written policy. 

6.19	This policy document (only relevant part) with a heading “Policy No. 11/2003 (Revised January 2008)” with a subject matter stating “STAFF CASH LOANS” was tendered in evidence by the employer through Exhibit “4”. 

6.20	The employer gave evidence that this was the only medium for the staff to access authorized loans from CCFL and nothing else. 

6.21	The said policy was put to the grievor where she denied any knowledge of ever seeing or being alluded to the policy whilst she was employed by CCFL. 

6.22	Relevant parts of the terms and conditions stated in the policy that this ERT has noted are the following:-

•	“The Board of Directors has agreed that permanent staff may be granted cash loans to assist their personal needs…

•	The maximum loan available is 5% of salary and loans will be for a maximum period of one year.

•	Requests for loans should be made by writing to the Managing Director.

•	This assistance to staff is available after one year of service”. (highlighted parts are my emphasis)

6.23	The employer admitted that a copy of the said policy was never handed over to the grievor at the time of her recruitment when she was given her letter of employment. The employer, however attempted to clarify that there was no need as it was mentioned or alluded to in the part marked as “STAFF BENEFITS” in her contract of service and if the staff wanted a loan, she could have sought further information on the said policy. Mr Mow gave further evidence that every CCFL staff had access to a computer server where this document was generally stored for staff perusal and use whenever a need arose.

6.24	The grievor throughout her evidence maintained that she had never seen this document either a hardcopy; or on the computer server; or being made aware by the employer, verbally or otherwise. This was rather difficult to fathom for this ERT given that she being in a receptionist position for at least one year before her termination, one would have assumed that the grievor would have had access to a computer in her daily duties and responsibilities. I have noted that part of her Duties as per contract of employment included “…typing of general correspondence…”. Certainly she would be given a computer to undertake this duty as I had no evidence that the grievor had no access to a computer at all.

6.25	I have thus given a benefit of doubt to the employer that the grievor could have attempted to read and use the document stored on the server when she needed to obtain a staff loan as any reasonable and responsible employee would be required to do so. Further, there was no evidence that the said policy did not exist at all. 

6.26	Quite on the contrary, in Leo Tukana’s grievance (during substantive hearing), he admitted using the same policy to access staff loan in his long service with the employer. Because both cases bear similar facts in terms of the allegation of summary dismissal being unlawful and unfair where both the grievors were simultaneously discharged from their employment on the same day, there is indeed overlapping of facts and evidence in both grievances although heard separately. 

6.27	Even if the grievor here may argue that Leo’s admission to using the employer’s policy in order to obtain a loan from the employer has no relevance to her case, I still see no reason why the employer would suddenly conjure a policy of such nature which carries with it a significant burden on the employer for any potential loss if such loans are not repaid by the staff. 

6.28	Here, the employer is a financial institution and loan matters cannot be something plucked from the air out of blue. It is something that is indeed serious if ‘Board of Directors’ had a role to play in the decision-making. Further, a reasonable person would appreciate the need to have such guidelines and rules in place where hands are daily dealing with cash, as the employer themselves are engaged in credit and cash transactions with their customers. It also goes without saying that every financial institution has their unique lending policy in compliance with the laws of Fiji for their customers, and this ERT has no reason to doubt that they would be complacent or not put in place a similar loan policy for the use of their own staff.

6.29	If the policy was in place by the employer but the employee was not aware of any such policy as admitted by the grievor through Exhibit “9” (at page 2) then the most sensible thing for her to do was to ask or obtain information from the employer directly, either through her Manager or someone in higher authority. 

6.30	The grievor was in fact questioned in her cross-examination whether she could have easily queried the Financial Controller or Managing Director and obtained the relevant information when she needed the loan. Her answer was that she could have but it appears she chose not to go to these persons for any clarification or information.

6.31	Clearly the employer here was trying to establish that the grievor should have read her contract of service properly and if she had doubts, she was to go to the person in authority and not to a cashier to either access a loan or anything of such importance. Needless to say, a cashier in any working environment is commonly known as someone who receives money from the clients/customers for his/her employer and not for herself. 

6.32	In fact it is absurd to imagine how anyone could so informally and without due regard to a cashier’s real duties also extent her responsibilities to a “lending” role and that too using the same employer’s money she receives from the clients. And this was happening in a financial institution where the staff would at least have had some understanding as to the real purpose of a loan facility, the reason for prudential regulation to protect a client’s money and not dipping in the till freely and at the fancy of a staff who was undoubtedly at the bottom of the chain of command.

6.33	Mr Rae questioned the FC why the employer was unable to pick up what they regarded as the “unauthorized” practice of IOU much earlier where apparently the amounts alleged to be taken in cash loan from the cashier was received by the staff over a period of “some” months. And relatively a large sum of money was involved here. Clearly, Mr. Rae was attempting to point out to the ERT how the employer was unable to discover and detect any “variance in the day’s banking” which money evidently was passing hands from the employer’s customers or clients directly to the staff of CCFL. 

6.34	Mr Mow, the FC tried to explain that when he checked the receipt book it was balanced. It was his evidence that there was no variance noted in terms of cash receipt summary with the till summary. 

6.35	Mr. MacDonald tried to substantiate this aspect of the evidence to the effect that when the loans given by the cashier came to light, he concluded that “eight staff had colluded together to deliberately falsify company records” which he regarded as a breach of trust. It appears that the banking in terms of the days’ takings was not properly entered in the Summary Book where Mr. MacDonald further said that “she was instrumental in falsifying the records”, referring to the cashier. 

6.36	An email sent by FC to Ms Paul on 27th September 2010 also requested similar nature of information and she appeared to know what the FC was referring to (“Can you please prepare summary of amounts paid by client and receipted but not banked”); to which Ms Paul replied – SORRY FOR THE DELAY, M DOING SUMMARY NOW AND WILL EMAIL SHORTLY”.

6.37	This whole ‘banking’ issue appeared to be the employer’s final conclusion as to the reasoning provided in terms of “misappropriation of company funds” as stated in the letter of termination. I will explore this later in terms of whether s33 (2) of the ERP was satisfied by the employer.

6.38	For now, I can only assume that the cashier was either smart or lucky where the employer believed everything the cashier provided where such vital ‘banking’ information was concerned without having in place double checks and balances. It was clear that the loan to the staff had built up over a period of several months until the employer finally made the discovery of any “unauthorized loans”. Indeed this ERT is in awe how an employer of CCFL’s standing in terms of its core function to deal and provide credit facilities to the public could have allowed its own house to be in such disarray.

6.39	That being said, a wrong perception or conceivably a wrong approach to an action or conduct that would naturally demand a reasonable person to do the right thing cannot be veiled behind ignorance or sheer disregard for doing the right thing. Consequently, even if the cashier was using a system or practice of IOU, the grievor should have still sought clarification from someone in higher authority before she allowed herself to be trapped into a practice carried out by the cashier that was evidently not authorized by the employer. 

6.40	I must state that it was established to this ERT that the loans was not authorized by the employer.

6.41	Naturally, if it was authorized, then upon discovering that certain staff was in such practice, the employer would not have reacted immediately in terms of initiating an investigation and thereafter invoking seriously the most harshest of all the penalties, being summary dismissal of all the eight staff involved in the practice, including the grevior. 

6.42	Mr. Ross MacDonald also gave credible evidence that the so-called practice of IOU may have been observed or followed by some staff but it was never formally made known to the staff as a practice or lending policy to be condoned or acceptable in terms of seeking cash loans from CCFL. The only form of obtaining a legitimate loan was the policy set down by the employer.

6.43	This was confirmed by the grievor’s own conduct on the basis that she never sought FC or MD’s advice on how to obtain a loan but entirely relied on her own judgment and perception when clearly a right thinking person would appreciate that you cannot just go to the cashier and get a loan. 

6.44	There is also merit in Mr. MacDonald’s statement in terms of “Exhibit 3” which was an email tendered in evidence by the employer (and which was not objected by the grievor) where one of the staff terminated with the grievor known as Sereana (as named in 4.10 above) stated that: 

“…it was just gradual IOUs over time that got a bit out of hand. We were not paying it back quickly enough to clear it. Please don’t blame Symone…I don’t know how I allowed myself to get into this mess but it’s done and I have to face up to the consequences. So we’re terminated I know…” (underlining is my emphasis).

6.45	This email excerpt to the ERT indicates that the involved staff who became part of the IOU system practiced by the cashier which the employer categorically denied giving any authorization for, was in fact, known to the loan recipients to be unacceptable form of seeking loan from the employer. 

6.46	If it was authorized or even was an acceptable practice, it would not have got “out of hand” or that the staff would consider it a “mess” or even appreciating the fact that it could lead to a “consequence” such as termination.

6.47	A further scrutiny of this email by Sereana sent on Monday, 27th September 2010 at 8.45am, proves that it was sent from overseas as she was to return from a trip on October 04. The discovery of the alleged offence was made on Friday, 24th September, 2010 by the FC and by the following Monday, Sereana being abroad was already providing her explanation to the FC. If she had knowledge that the alleged IOU practice was exposed to the employer, it would be safe to say that the grevior being in Fiji still at her workplace would not have been without knowledge either. 

6.48	Further the FC met with all concerned eight staff to discuss their alleged involvement in the IOU practice after obviously the cashier had provided the names at about 10.33am on Monday, 27th September 2010 - the email of the cashier to FC sent at 8.15am is clear that she was informed by the FC that she needed to provide “the names of the staff, prepare summary of amounts paid clients and receipted but not banked, etc”.

6.49	Where discharge of good faith and mutual trust is concerned between the parties, there are many questions still to be answered: for example,

•	Why did the grevior wait to be called for an interview to discuss the loan she had obtained from the cashier if she believed that she had not wronged in any way? Could she still have openly approached the FC and given her explanation if she genuinely believed that she had been misled into believing that IOU was the authorized practice for obtaining a staff loan? (After all Sereana attempted her explanation from abroad);

•	Why didn’t she pay the loan prior to this issue coming to light when she had obtained the loan on 22 September 2010? Why wait till the employer to ask?

6.50	To prove that the grevior had some inclination that the practice used by the cashier to give out loans was not the correct procedure, has to be read in line with the grievor’s admission in her cross examination, where she said that she was aware for a long time that some staff were taking loan from the cashier using the money that belonged to the company. However, it appears that she never felt the need to confirm with her Manager (FC) whether it was the correct procedure or not when she herself needed a loan. 

6.51	It also begs the question that if the grievor had knowledge of some staff engaged in this practice openly, why she could not herself candidly approach the FC straight after the discovery was made on 24th September 2010 and immediately explained her side of the story to present her innocence of being trapped into something she genuinely had belief was the right procedure. Why wait till she was terminated. The window of opportunity is quite small here but Sereana being overseas was already aware of the IOU being discovered and was providing her side of the story while it appears the grievor was waiting for the employer to decide whatever course of action they would take, this is when she would offer her explanation. 

6.52	In fact, there was no evidence that the cashier had informed the grievor that IOU was an authorized medium at the time she had obtained the loan and that she believed this without intentionally trying to violate a staff loan policy that was in place. Quite the reverse, she came to know IOU was “a longstanding practice” after her termination when she met the cashier who explained her about the IOU and this was one ground that she attempted to rely on to justify her actions to the employer when she wrote to them on 12 October 2010 (Exhibit “9”).

6.53	There was in fact no evidence that the grevior was made to believe that the practice of IOU at the hands and discretion of the cashier was the only medium for accessing staff loan at CCFL. Further, no independent witnesses came forward to the ERT to explain that despite it was only a practice, it was an open and widely known practice at CCFL, and therefore the employer (referring to MD and FC) ought to have known about it. 

6.54	Reference to certain “senior staff members” also being involved in this practice was not properly put to this ERT. But the FC, Mr Mow being a senior Manager stated categorically that he was unaware of this practice being utilized by the staff until he discovered on 24th September 2010. Hence his immediate concern and ensuing investigation. In my opinion, if the IOU was an authorized practice, common sense would dictate that the FC would know of its existence as it would impact the financial books of the employer when same money receipted to clients were also given out to staff as loans.

6.55	Whilst the Tribunal has noted that this was the grievor’s first time to seek a loan from the cashier under the alleged practice of IOU, it does not absolve the fact that she had failed to adhere to a proper loan policy that was in place for purposes of seeking an “authorized loan”, which the evidence proved was the only medium for a loan. It thus leaves this ERT to infer that it could be that the grievor had suspected it to be an unauthorized practice but did not question as evidently that it was undetected by the employer for so long. 

6.56	I say this with much concern because the contradiction in the grievor’s testimony is quite obvious – on one hand she was aware that some staff were taking money or loan from the cashier but did not confirm with anyone as to its legitimacy or correctness and on the other hand, she attempted to justify taking a loan from the cashier on the basis it was longstanding practice of IOU, a fact she discovered after her termination. 

6.57	Clearly her ignorance is one thing, but trying to justify that it was a long standing practice as per the cashier’s words and the discovery of the fact after the termination is certainly a doubtful and groundless defence. It then leaves this ERT to ponder whether the grievor could easily vindicate what the employer regarded as a “gross misconduct” via writing a letter after her termination on 12 October 2010 (Exhibit “9”) for consideration for reinstatement where she had stated:

“Sir, therefore I do apologize for any inconvenience caused due to my ignorance of company policy and procedures in such matters which had led me into this problem…” (at page 2 of the letter).

6.58	I must admit that this ERT was persuaded by the Employer’s submission filed on 13 December 2011 at clause 1.14 where they had stated that:-

“Inextricably linked with the employee’s duty to act in good faith is a fundamental implied term that there must be mutual trust and confidence between the employer and the employee” (at pg 4) 

6.59	In my mind, a prudent person cannot be so causal about matters of money in any given circumstance, lest in a working environment such as a financial institution this employer is. Here, even a person of receptionist position which the grievor was at the time cannot deny that taking a loan is not a trivial matter when she had knowledge that the cashier was using CCFL’s money to lend to the staff. 

6.60	How can it be obtained from anyone without any rules (or terms or conditions) when you know the person dishing out the money does not own or have a right to part with that money? Surely then a staff loan policy as opposed to any “practice” had a role to play in this employment environment, say, when compared to what would be the policy for giving out loans to CCFL’s customers/clients. In addition, due to heavy flow of cash on daily basis, such practice (IOU) is indeed a risk factor for the employer and so it allows this Tribunal to place importance on the policy that they say was the authorized medium for staff loan and not the IOU practice.

6.61	Here, in my opinion the test is “what would a reasonable person have done when a loan was sought from this particular employer”. The loan that was given out by the cashier was coming from not any employer, but a financial institution where the grievor was employed for well over a year. 

6.62	Therefore it not important that the employer did not state to the staff either verbally or in writing that IOU was not the correct procedure for a staff loan; rather, the staff loan policy (in writing) was in place to indicate what was the employer’s preferred medium for an authorized loan and this was the rule that was breached by the grievor.

6.63	Besides it makes sense that the employer can only state or allude regarding a practice whether it is authorized or not if they themselves had the knowledge of the said practice. It was employer’s evidence (and quite good evidence) that they were not aware that staff was practicing IOU behind their back. There was no evidence either that they had sanctioned any IOU in the past; in fact there was some indication that the employer had terminated previous cashiers for same reason (the names were clearly provided in Leo Tukana’s case).

6.64	Obviously, if the approved policy was utilized to seek a loan, there were pre-conditions to be satisfied prior to being eligible for a loan such as staff being employed for at least a year, approval from MD, only 5% of salary within a year would be allowed, etc which would essentially allude to some form of control maintained over the loan. If there is some form of control, the potential for anything getting “a bit out of hand” as stated in email of Sereana Dakuni would have been minimal or easily detected. Indeed the largest sum of money this particular staff (Sereana Dakuni) took was well over $10,000.00 mark. In comparison, the salary capacity of a cashier at CCFL in terms what was offered to the grevior was within the range of $6000-$7000 p/annum. Surely any eligibility for loan would have been contingent on these factors. 
6.65	I also view that regardless of the fact that the money was not recovered by the employer in terms of instituting any legal action against this particular staff (Sereana) that Mr. Rae was trying to allude to the ERT in terms of the employer’s attitude towards their financial loss, this has no actual bearing on the (mis)conduct that took place. It was a fact that such monies was taken by the staff through their admission. Just because the recovery is not made does not completely pardon the staff who carried out an action or conduct that the employer considered “unauthorized”. Clearly in the employer’s mind, as soon as they came to knowledge of the said “practice” they immediately initiated an investigation on the basis that it bordered on an alleged unauthorized conduct.

6.66	I am then inclined to dwell on Mr. Rae’s own postulation of the whole scenario whether there was indeed a “scam” involved here. And whether the staff who were seeking these loans were aware of the gravity of the actions or conduct of the cashier including the fact that they were aiding and abetting such conduct of the cashier. I must comment that the probability for the alleged IOU practice by the cashier being classified as a “scam” is quite a plausible scenario as no reasonable employer would have acted to immediately terminate all the concerned staff at once within days of discovering the so-called practice. 

6.67	This is because I did not see a confused employer who did not know the manner in which their staff could obtain a loan. There was enough evidence to prove that from the very start the employer regarded the IOU and ensuing loans given to the staff as an “unauthorized loan” and the MD maintained his position which was consistent throughout his testimony.

6.68	Going back to Sereana’s email evidence, this adequately and reasonably allows me to assume that the staff who obtained loan under the cashier’s alleged IOU practice knew and appreciated that if the employer was to come to knowledge of the manner in which they had obtained these loans via the cashier, they could face consequences such as termination where it clearly stated “…so we’re terminated, I know…”. In that light, the Tribunal is convinced that:-

a)	The employer had reasonably drawn conclusion that the money used by the cashier to loan the grievor was not authorized by CCFL. Common sense would dictate that the owner of the money decide whether it was authorized or not and if the employer being the owner of the money says that they did not authorize the loan then, this Tribunal has no basis to double guess the employer;

b)	The Policy (rule) was in existence where a staff loan could be properly sanctioned and obtained from the employer. This rule was breached by the grievor;

c)	The grievor was in fact aware that some staff was taking loan from the cashier but she remained ignorant and disinterested rather than first ascertaining whether or not this was the correct procedure for obtaining a staff loan. All she had to do was ask her supervisor or MD; and

d)	The staff involved in IOU practice had a fair idea or knowledge that IOU was unauthorized practice that could lead to termination.

6.69	Failing adherence to employer’s policy or rule, it provided the employer a basis to allege “gross misconduct” in terms of having a valid reason or cause where the grievor’s actions did not meet the employer’s standard of conduct set down to obtain an authorized loan. It is then this ERT’s findings that the employer’s main reason for dismissing the grievor was for a lawful cause which was duly established from the evidence.

6.70	Once a lawful cause is established, it should thus suffice for purposes of section 33(1) (a) in terms of meeting the criterion for “gross misconduct”. To this ERT there was credible and overwhelming evidence to prove gross misconduct was committed by the grievor. Once the employer has made this a basis for termination, they have rightly invoked section 33(1)(a) after properly conducting a “guilty” assessment of the alleged offence and notifying the grievor of the same (on procedural fairness – see below). Thereafter they will be required to immediately terminate the grievor where procedures are concerned (as per principle in Isoa’s case – see below)

6.71	But before that I wish to address the issue pertaining to whether the penalty was disproportionate to the alleged offence or not.

7.0 Was the penalty disproportionate to the alleged offence?

7.1 I have already said that there was ample evidence to justify gross misconduct alleged by the employer. This is because to accumulate more than $20,000.00 in entire loan using an “unauthorized” practice cannot be justified on the basis that: 

•	First, the grievor did not know of the correct loan policy; 

•	Second; it was a longstanding practice as per the cashier’s words alone regardless of the fact that the grievor only discovered after her termination that such practice (IOU) was used by the cashier; 

•	Third it was her first offence; and 

•	Forth, she is only a small part of the entire loan as she had borrowed a mere $288.00 which she paid the employer as soon as possible. On the other hand, the employer has not attempted to recover bigger loans such as one taken by Sereana Dakuni.

7.2 I have here applied the case of Sinclair v Neighbour [1967] 2 WLR 1 where the Court of Appeal ruled that one act of dishonesty was sufficient to warrant summary dismissal where it cautiously demarcated between placing less weight to the labeling of the act or misconduct with that of the facts that establish that misconduct. 

7.3 This case has similar facts to this case where the employee had put an IOU in the till and repaid the money next day. He was summarily dismissed. His claim for damages for wrongful dismissal succeeded in lower court but Court of Appeal overturning verdict stated that:
 
“… I think that he (the trial judge) fell into error in attaching too much weight on the label and not enough to the facts. The facts were established. The fact that the manager took the money from his employer’s till behind his back knowing that the employer would not consent was established; and it seems to me that it does not really matter very much whether it justifies the label ‘dishonest” or not…” (my emphasis).

7.4 Therefore, even if this was grievor’s first offence, it was an established fact that she had taken the loan which she duly admitted to the employer and to this ERT. It was also established that she ought to have known the employer’s staff loan policy and not relied on the cashier’s practice when she was aware that some staff was obtaining money in this manner yet, she chose not to clarify with her Manager whether it was the correct procedure or not. 

7.5 Further, little or insignificant amount or paying the money back to the employer is no ticket to writing off the gravity of the offence which was in my opinion utterly serious and reprehensible to sever the trust and confidence that tied the employer and employee into that special employment relationship on the premise of good faith from both ends. 

7.6 As such, I did not find that the offence here was in any way disproportionate to the gravity of the offence as clearly, even one such serious act within the confines of the employer’s rules and policies can result in summary dismissal of the employee.

8.0 Is Summary Dismissal Justified in Procedure?

8.1 To eliminate any confusion or better still legal ambiguity, ideally Section 33 of the ERP should have further stated that a dismissal must be for a fair reason after following a fair procedure, as this is a concept that many, especially the employers are failing to completely understand. The burden of proof is always on the employer to disprove grievance on the basis it was carried out lawfully and fairly. Thus it becomes important that the Tribunal clarify what should be the fair procedures for dismissals to reduce litigation and increase compliance. 

8.2 In my opinion, although all the mentioned reasons for ending the employment relationship will have the same end result, different procedures would have to be followed prior to dismissing an employee. How else can an employer come to a guilty assessment of the alleged offence under s33 of the ERP unless some procedures for investigation and truth or fact finding are conducted? 

8.3 In fact one of the four pronged Foley test for dismissal cited with approval in X v Y [2004] EWCA Civ 662 is that:-

i.	the employer must show that he believed that there had been misconduct by the employee; 

ii.	that there were reasonable grounds for that belief; 

iii.	that he had carried out as much investigation into the matter as reasonable in all the circumstance; and

iv.	that the decision to dismiss him for that conduct reason was within the range of reasonable responses of a reasonable employer.” (my emphasis)

8.4 Under s33 of the ERP, it is my view that prior to arriving at a guilty verdict, facts and evidence gathered by the employer will need to be reasonably and fairly assessed where at least the employee’s views and objections have to be noted in line with the purported breach of the rules, polices and standards of the employer. This would be, in my humble opinion the prerequisite investigation process prior to arriving at the guilty verdict. 

8.5 Notably, the recent judgment in the case of Carpenters Fiji Limited v Isoa Latianara ERCA No. 7 of 2011 the following principle was provided where, Wati J has stated and I quote for quote:-

“…if there is serious misconduct, then it is the prerogative of the employer to terminate the employment immediately. If all these procedures of hearing and explanations are accorded to the employee, then the purpose of summary dismissal is lost…” (at page 8).

8.6 Isoa’s case is not clear whether any procedures are required to ascertain the guilt of the grievor (and what sort of procedures should be used) prior to declaring the alleged conduct “serious”, but it is quite clear that once a serious (or gross) misconduct is established in substance, then procedural fairness is not required for purposes of a summary dismissal. To that end, the employer could immediately proceed to terminate the grevior. 

8.7 I must comment that it is a challenging task to find that balance between reasonably arriving at a guilty assessment and complying with s33 (2) of the ERP where reasons for summary dismissal must be provided in writing at the time of dismissal. 

8.8 For this, employer will have to carry out reasonable “procedures” for investigation and then communicate the same to the grievor in such as way that “good faith” (Wallace case) at the time of dismissal is not compromised. After all one of the grievor’s contention in this matter was that she was not properly made known the reasons of her termination in compliance with s33(2) of the ERP.

8.9 Foley’s test gels easily with the principles of natural justice, where at least a fair process for investigation is required to be invoked prior to arriving at a guilty verdict where procedural fairness is concerned. In any given situation an employer cannot deny an employee his /her unfettered right to be heard but Isoa’s case is clear that once gross misconduct is established by the employer there is prerogative of the employer to waive that right and proceed to immediate termination.

8.10 The principle followed in the case of Dunning (A.J.) & Sons (Shoplifters) Ltd v Jacomb (1973) IRLR 206 is then more apt here, where the Court said:-

“…the approach developed that a procedural defect would only make the dismissal unfair if the decision might have been different at the end of the day. The trend is to see procedural matters as issues of substance to be weighted in the scales of the overall merits of the case”. 

8.11 Simply put, the employer’s right of summary dismissal arises not from a ‘divine’ managerial ‘right to fire’ but from the terms of the contract, express, incorporated and implied. When an employee commits a sufficiently fundamental breach of contract by failing or willfully refusing to carry out his/her duties, the employer has the right to dismiss him/her ‘on the spot’ without giving the requisite notice. 

8.12 Therefore, the question of natural justice does not arise in this case because first, ample evidence established that the grievor had breached the policy of the employer where this policy was the approved medium for obtaining a loan which was expressly contained in her contract of service. Second, I found nothing in the contract that gave the grevior a right to be heard before any type of dismissal. I want to be clear that I did not hear whether any agreed disciplinary process was in place at CCFL as clearly it was not contained in the contract of service.
8.13 I would like to further reiterate that where the allegation of unfair dismissal is concerned, the Court in Isoa’s case made it abundantly clear that:-

“…it is not the aspect of right to be heard that leads to unfair dismissal. It is the manner of treating the employee in carrying out the dismissal that must be considered. The employer’s actions must be assessed to ascertain whether the employee was treated with fairness, respect and dignity in carrying out the dismissal” (emphasis added).

8.14 Let me look at the manner in which the grievor was terminated as I have already accepted that there is justification for “gross misconduct” in substance in that the grevior’s conduct at the time of her dismissal was within a range of reasonable responses as alleged by the employer (as per principle in X v Y [2004] EWCA Civ 662).

8.15 Here, the employer found out on or about 24th September 2010 of the alleged offence. Upon request of the employer, on 27th September, 2010, the cashier finally provided the information required to establish the employer’s allegation of the “unauthorized loans” where they then proceeded to interview the concerned eight staff including the grievor on the same day. 

8.16 In the meantime, whilst I assume the “investigation process” was taking place, the grievor remained in her usual duties without loss of any pay or deprivation of any employment entitlements. 

8.17 It was not clear exactly what happened between 27th September 2010 to 30th September 2010, other than that I noted that the FC, Mr Mow gave evidence that he had a verbal meeting with the MD, Mr MacDonald to conduct a Senior Management meeting to take a decision (I assume to decide on the appropriate sanction or penalty). Subsequently, the decision of the (Senior) Management was to “…terminate on the grounds of unauthorized taking of money and gross misconduct” as per FC’s evidence.

8.18 On 30th September 2010, the employer called the grievor into the MD’s office, discussing the alleged offence and provided an opportunity to sign a confirmation letter (Exhibit “8”). It was confirmed by both the grievor and Mr MacDonald that it was a voluntary act without any undue pressure, coercion or threat where the grievor signed the letter admitting that she had taken a loan which she had paid in full to the company. Hereafter the MD handed the grievor her letter of termination dated 30th September 2010 to take immediate effect.

8.19 It was confirmed from both the employer and the grievor’s evidence that the grevior did not seek to discuss her summary dismissal in any regard as she left soon after she was handed over her termination letter. The grevior later wrote to the company seeking reinstatement via letter dated 12th October 2010, almost 12 days after her termination. 

8.20 Under section 33 (2) of the ERP 2007 it is mandatory that “the employer must provide the worker with reasons in writing for summary dismissal at the time he/she is dismissed” (my emphasis). Here, time of dismissal is critical component to lawfully establishing “summary dismissal”.

8.21 There is no doubt in my mind that the employer discharged the grievor from her employment with respect and dignity at the time they carried out summarily dismissal and provided reasons, both in writing and verbal (through interview/discussions). In fact, there were two mutually exclusive evidence to satisfy s33(2) of the ERP – the letter of termination and letter of confirmation (Exhibits “7” and “8” respectively) that confirmed that the grievor had both verbal and written communication as to the reasons for her summary dismissal when she was terminated. 

8.22 Hence the grievor was well informed as to the actual reason of her termination. How can she not be – she had two meetings with the employer on 27 and 30 September and then she was given her written termination letter. Then she wrote to the employer some 12 days later and recounted the events in her own version. In her letter dated 12th October 2010 the grievor wrote and gave an extensive overview of what she thought had happened leading to her termination. 

8.23 Hence, I am satisfied that employer had reasonably conveyed to the grievor the reasons for her summary dismissal where she appeared to have had all the details to properly understand the exact nature of the allegations and circumstances leading to her termination.

8.24 The only sticking issue that needs further clarification is whether technically “misappropriation of company funds” suffices under s33(2) in terms of the allegations of gross misconduct where the grievor is saying this would imply “abuse or misuse for purposes other than intended by someone who has been entrusted with money for particular purpose”.

8.25 It was grievor’s contention that she was not the worker entrusted with the company funds: it was not her responsibility as a receptionist and so she had no responsibility for handling employer’s cash, but of course, it was the cashier, Ms Paul who had complete charge and custody of the money that was given away as staff loan to the grievor. 

8.26 There was further submission that “…these are not the actions of someone committing gross misconduct which is commonly accepted to imply serious and willful conduct designed to bring a loss or deprivation to the employer and seen as an intentional repudiation of the employment contract. Ms Keli’s actions come nowhere near this…” (at clause 3.5 of closing submissions by the worker). 

8.27 I beg to differ. Whilst I agree that the grevior did not have direct contact with the employer’s money and it was Ms Paul who was dishing out these “unauthorized” loans, she still indirectly obtained that money regardless of the manner in which she did. This only confirms that the grevior ought to have appreciated that it was not even Ms Paul’s money to give away to her. But she still took the loan from Ms Paul. Her evidence was clear that she knew that the cashier was using the company money to lend to some staff over a period of time. 

8.28 Ignorance is then no defence of a serious nature of offence committed here in my opinion. Otherwise anyone discovering that a property not belonging to them can safely accept and regard as their own when they come into possession either unintentionally or by a mistake of the party who owns that property. In either circumstance a reasonable person would still have to ascertain whether or not it is their right to claim that property (in this instance the cash loan). She did not attempt to clarify with the MD or the FC who were the only persons that came before the ERT to say how loans could be sanctioned under their hand with proper authority. 

8.29 Therefore, I am able to understand why the company would regard these “unauthorized loans” as per Mr Mow’s evidence in the context of “misappropriation of company funds” on the following rationale:-

•	Mr Rae himself called this a cashier’s lending scam; and

•	Mr. MacDonald gave evidence that CCFL regarded the overall act of the grievor in terms of taking a loan (or company money) without authority, particularly when all the loans given by the cashier came to light, he concluded that “eight staff had colluded together to deliberately falsify company records” which he also regarded as a breach of trust. 

8.30 Let me look at the definition. 

Misappropriation is defined by Webster’s Unabridged Dictionary as: 

“wrong appropriation; wrongful use”. “Wrong, often corrupt practice – abuse, misapplication, mishandling, etc”

Misappropriation of funds is defined as: 

“fraudulent use of funds - money - by a person, persons, entity or entities, other than their legal or rightful owner. The quick synonym is theft.”

(source: http://wiki.answers.com/Q/What_is_the_definition_of_misappropriation_of_funds)

8.31 To then use an argument that the grevior was not properly advised the reasons of her termination with exact amount and nature of the offence and that misappropriation was not done directly by the grievor because she did not handle the money as the first point of contact is a very weak, indeed a baseless defence in my opinion. There is no contention in my mind that the grievor wrongly obtained and used the money she had no right to. 

8.31 In that regard, I am satisfied that the employer has complied with the requirements of s33(2) of the ERP .

9.0 Decision & Orders:-

1.	The Employer had lawful cause or valid reasons to invoke summary dismissal on the grounds of gross misconduct under s33 of the ERP 2007. Hence, the Employer has properly carried out summary dismissal in law (substantially and procedurally). 

2.	The Employer has also fairly carried out summary dismissal by according respect and dignity to the grievor at the time of her dismissal in that:-

(i)	The employer had immediately proceeded to inform the grievor of their decision to summary dismiss Ms Keli; and

(ii)	The employer also provided to satisfaction of this ERT valid and proper reasons in writing pursuant to s33(2) of the ERP.

3.	The ERT did not find that the grevior's offence was disproportionate to the gravity of the offence. Here, gross misconduct was duly established where all eight staff who were involved with the grievor and alleged of the same offence received the same penalty regardless of the amount they took in staff loan or the fact that they had paid off the loan before their termination. They were all discharged fairly and equally on the same day from their employment without notice.

4.	Accordingly the allegation of unlawful and unfair summary dismissal is dismissed forthwith.

5.	The parties will bear their own cost in this matter.

Dated at Suva this 13th day of March, 2012.

LEGAL TRIBUNAL